Diminished returns on cutbacks

However, there's a chance of diminishing returns when people cut back watering their lawns or flush the toilet less often, said Colin Polsky, a professor of geography at Clark University in Massachusetts.

"At some point, you've squeezed out all the non-essential use for water, and you have no place to go. And if the drought is the new normal, you have fewer tools to work with to deter the impact," he said.

The bill targets California, where drought conditions have put the whole state into emergency status—but it could be used as a guide for other states, according to Feinstein's website.

Among other provisions, the bill would ease restrictions on water exports to agricultural areas of the state. It also calls for rescheduling water supplies in wet years to prepare for future droughts, while also easing some environmental restrictions.

'Policy exacerbates California drought'

That last part doesn't go far enough for some who want to stop a law already in place.

"The biggest policy that exacerbates the California drought is the Endangered Species Act," said Rob Vandenheuvel, president of the California Milk Producers Council.

Vandenheuvel said that around 800,000 acre-feet of fresh water in California was flushed into the Pacific Ocean last year—water he said could have been pumped into storage facilities. But because it was feared that an endangered fish, the Delta Smelt, would be killed swimming near the pumps, the water was dumped in the ocean.

Water rights fight

In what is often a complex maze of rules, rights vary from state to state. In California, it's basically allowable for towns and farms to withdraw water from the surface, ground or rivers for a reasonable and beneficial use—sometimes without restrictions.

That has led to lawsuits over who has full control of the rights and legal attempts to reduce water usage as well as divert water sources.

Florida doesn't have that problem. In the 1970s, laws were changed so that no one owns the water, not even farmers, said Chip Merriam, vice president of legislative and regulatory compliance at the Orlando Utilities Commission, in Orlando, Florida. That has led to a somewhat less complicated system of water allocation in drought conditions, Merriam said.

Drought to get worse

That's led to some discouragement on how to legislate dwindling water supplies.

"There are short-term things you can do to minimize the impact," said EWG's Cox. "But it's really the long term that we have to look at. If the drought ends, and it's business as usual with water, then I'm not optimistic about the future."